23 Feb, 2021

Buying a home before selling your home can be accomplished a few different ways.

  1. If your income, credit & debt servicing allows, you can simply qualify for a mortgage or HELOC through a bank when buying a home before selling your home.
  2. If you are like many Canadians, you can’t always qualify under traditional guidelines when buying a home before selling your home. However, if you have enough existing home equity you can qualify through Alternative Mortgage Lenders using inter alia.

How Does Inter Alia Work for Buying A Home Without Selling Your Home First

This would be done by placing a mortgage across both properties. Your current home would have a 1st or 2nd mortgage depending on if you currently have a mortgage on your property and the new home would simply have a 1st mortgage charge registered. If your current home does not have a mortgage on it, then a 1st mortgage would be secured against both properties.

Here’s how it can be done.

Leveraging your existing homes equity along with the value of your new home purchase using what is called inter alia. (Latin phrase for “among other things”).

Take for instance your primary home is valued at $600,000 and you have $100,000 1st mortgage.

You are purchasing a new home for $750,000.

Your total value is $1,350,000 and your total mortgages are $850,000.

This would make your total 1st & 2nd mortgage 63% loan to value.

Advantages of Buying a Home Before You Sell Your Home

The advantages of buying a home before you sell your home can be many.

  • Finding your dream home without being on a short timeline
  • Ability to have flexibility in closing can give you opportunities more desirable to sellers
  • Time to sell your home on your terms to maximize possible profits.

Disadvantages of Buying a Home Before You Sell Your Home

The disadvantages of buying a home before you sell your home can be many.

  • Costs associated with obtaining a home equity loan. I.e. (legal fees, broker fees, lender fees “if applicable” title insurance, insurance binders, “if strata”. Strata Form B. Along with any payout penalties.
  • Interest costs. Home equity loans come with a higher
  • Market value changes. Real Estate markets go up, but they also go down.

What Happens When You Sell Your Old Home?

When you finally sell your old home, a few things may happen:

  • If the proceeds of the sale are enough to payout your mortgage you will end up with a clear title home.
  • If there are not enough proceeds from the sale of your home, you will end up with a 1st mortgage charge still registered for the balance owed. (We can then go to back to a bank and get you the best rate mortgage to payout the financing)


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